Industry BeatCED Magazine, January 2010
Article Date: 01-01-2010
Copyright(C) 2010 Associated Equipment Distributors. All Rights Reserved.
Expanded Loss Carryback Option May Provide Dealers with Cash
AED’s Start Us Up USA! campaign scores victories with NOL law and extension of the home purchase tax credit, both important dimensions to CE industry recovery agenda.
The relief provided under the Worker, Homeownership, and Business Assistance Act of 2009 differs from similar relief issued earlier this year in that the previous relief was limited to small businesses (less than $15 million in revenue). Under the new law, almost all businesses may elect to carry back a net operating loss (NOL) for a period of three, four or five years, to offset taxable income in those preceding years.
"Tax refunds could provide an important influx of cash to help dealers as they weather the current recession," said Steven G. Pierson, CPA and shareholder in Seldon Fox Ltd. Record numbers of businesses are expected to be eligible for the refunds. Pierson participated in an AED webinar to address dealer questions on the carryback law on Nov. 13, 2009.
According to the law, the IRS has 90 days in which to examine the application, discover any errors or omissions and to determine the amount of the decrease in tax. The decrease in tax is applied against unpaid tax first, with any remainder credited or refunded within 90 days.
A business can elect up to a five-year carry back of net operating losses incurred in either 2008 or 2009 (but not both). Small companies (with less than $15 million in revenues) that already availed themselves of the five-year carry back for 2008 may also take advantage of this carry back potential for 2009.
The current relief is applicable to any taxpayer with business losses, except those that received payments under the Troubled Asset Relief Program.
An NOL or loss from operations carried back five years may offset no more than 50 percent of a taxpayer’s taxable income in that fifth preceding year. This limitation does not apply to the fourth or third preceding year. The procedure applies to taxpayers that incurred an NOL or a loss from operations for a taxable year ending after Dec. 31, 2007, and beginning before Jan. 1, 2010.
Common Questions Answered
According to Pierson, one of the most common questions people ask is if they can change a prior decision to waive a carryback, and now carry back the loss. "The answer is ‘yes,’" said Pierson. "Under the old law this decision was irrevocable, but under the new law, you can do it for this purpose."
As with all tax questions, it’s best to consult with your accountant to determine if this is a good option for your business. For complete details of the new law visit www.irs.gov/pub/irs-drop/rp-09-52.pdf. The NOL carryback provision is an important component of the construction equipment industry recovery agenda and should help jump-start the equipment industry.
In the News
Stephenson’s Rental Services, a Toronto-based tool and equipment rental company, has acquired the general equipment rental assets of Oxford Builder’s Supplies, an Ontario-based division of EllisDon Construction Ltd., which is a portfolio company of EdgeStone Capital Partners.
ALL Canada Cranes & Aerialshas added two new facilities – one in Mount Pearl, Newfoundland and Labrador and a second location in Sunbury, Ontario. ALL Canada Cranes & Aerials consists of the ALL Canada Crane Rental Corp. and ALL Aerials Ltd.
Roger Brown, senior vice president of global sales for Genie Industries, a subsidiary of Terex Corporation, has retired. Brown was one of the principals who took Genie Industries from a small aluminum products manufacturer more than three decades ago and turned it into one of the largest manufacturers of aerial products in the world.
"Roger is an icon of the aerial industry and engendered a feeling of respect among those he worked alongside and led," said Tim Ford, president of Terex AWP. Joe George, vice president global sales for Terex AWP will assume Brown’s responsibilities.
Mike Angus has been appointed distributor principal of Cummins Western Canada effective January 2010. Prior to that he was vice president and general manager of Cummins NPower, where he received the Chairman’s Award for his Six Sigma project that resulted in over $1 million of profit improvement. Mike holds a BS in Commerce from the University of Illinois and an MBA from the University of Chicago Booth School of Business.
Lawson Software’s latest version of Lawson for Equipment Service Management and Rental (ESM&R), version 1.2, offers preconfigured solutions based on industry best practices. The enterprise software package helps equipment dealers and distributors maximize asset tracking, availability and profitability, while reducing software deployment time.
Lawson has also announced that, effective Jan. 1, Stefan Schulz is being promoted to chief financial officer, succeeding Robert Schriesheim, who is departing Lawson the same date to become CFO of Illinois-based Hewitt Associates, Inc. Schriesheim will continue to serve on the Lawson board as a non-employee director. Schulz, currently senior vice president of finance and chief accounting officer, joined Lawson in October 2005 from BMC Software, where he worked for 12 years in various finance roles, including vice president of revenue operations and corporate controller. As CFO, Schulz will report to Harry Debes, Lawson president and chief executive officer.
In addition, software industry veteran and noted analyst Jeff Comport has joined Lawson Software as senior vice president of product management. In his new role, Comport oversees product management for the Lawson S3, M3, Strategic Human Capital Management and technology product lines. He, too, reports to Lawson President and CEO Harry Debes and is based in the company’s St. Paul, Minn., headquarters.
Ritchie Bros. Auctioneers Inc. has acquired the auction business and certain assets of Martella Auction Company, Inc., a Tipton, Calif.-based auctioneer of agricultural and industrial equipment. Ritchie Bros. intends to lease the 65-acre Martella auction site. The company is planning to build new auction sites in Salt Lake City, Utah, and Meppan, Germany in 2010.
Caterpillar Inc.has entered into an agreement to acquire JCS Co., Ltd., a subsidiary of Jinsung T.E.C. Co., Ltd., a South Korea-based manufacturer that specializes in producing undercarriage components for earthmoving and other off-road machinery.
IronPlanet announced it has exceeded half a million users worldwide, expanding the number of potential bidders and buyers across its marketplace in North America, Europe, and Asia-Pacific.
John Deere Power Systems has partnered with Crown Equipment to develop and produce a 2.4L liquified petroleum gas industrial engine for the new Crown C-5 Series forklift. The new engine was designed specifically to power material handling equipment in demanding applications.
Godwin Pumps, worldwide manufacturer and supplier of the Dri-Prime automatic self-priming pump, has announced the addition of John Hughes, Safety Specialist, to the Godwin Environmental Safety & Health (ESH) team located at its Bridgeport (N.J.) world headquarters.
"John has been brought aboard to support and strengthen our ongoing efforts to identify and reduce occupational risks to employees, and limit liability exposures to the company. This will include developing more advanced environmental, safety, and health policies and procedures relating to product manufacturing, transportation, sales and service," said Godwin president John M. Paz.
Hughes will be visiting each of Godwin’s 26 company-owned branch locations on a regular basis to help managers and employees observe and address known and potential hazards in the workplace. He will also assist in the development of safer work habits to promote company-wide improvements in overall safety.
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